Rules of removing the Director from the company
Certain rules need to be followed while removing the director from the company which is as follows:
1. A special notice is needed for removing a director.
2. A special notice needed to be handed over to the company must be signed either collectively or individually by the number of members who hold more than 1% of the total voting power.
3. The director’s removal has created a vacancy which, in case he had been appointed by the Board or the company in general meeting, has to be filled by appointing one more director in his place.
4. The newly appointed director will be holding office till that date up to which his predecessor would have continued in case he was not removed.
5. The director removed in this manner cannot be appointed once again by the Board of Directors as the Director.
How is it possible to change the Director?
It is imperative for every private company to have at least 2 directors, and any public company must have a minimum of 3 directors at any specific period of time. Here, we will take a look at some possible cases when it will be possible to remove a Director.
1. Where the Director resigns himself
A resignation is submitted by the concerned Director to the Board. In this situation, one has to take the following steps for removing the name of the director from the register of directors:
- A Board Meeting will be held by the company by providing clear notice of seven days (Clear notice implies a 21-day notice not including the day on which the notice had been dispatched and received.
- After the meeting, the Board will be discussing amongst themselves, and they will come to a decision whether the resignation will be accepted or not
- Once the resignation of the director is accepted by the Board, a Board resolution will be passed by them accepting the resignation.
- After the resolution has been passed, the outgoing director has to file the DIR - 11 form together with the Board Resolution, a copy of the letter of resignation, as well as the resignation letter delivery proof.
- While the director is accountable for filing the DIR - 11 form, the company is accountable for filing DIR – 12 form and the Registrar of Companies has to fill this form together with the Board Resolution as well as the Resignation letter.
- Once all the forms have been filed, the director’s name is going to be removed from the Company’s master data on the website of the Ministry of Corporate Affairs.
2. Removing a Director Suo-moto by the Board
A director can be removed by a company by approving an Ordinary Resolution provided the Tribunal or the Central Government did not appoint the director.
- There will be a Board Meeting by providing a notice of 7 days to all directors. They will receive a special notice informing them regarding the director’s removal.
- On the day when the Board Meeting will be held, a resolution will be passed for holding a special general meeting together with the resolution for the director’s removal subject to the shareholders’ approval.
- There will be a general meeting by providing clear notice of 21 days. In that meeting, the members have to vote on this matter. The resolution will be approved in case the majority happens to be in the decision’s favor.
- Before the resolution is passed, the director will have an opportunity of being heard.
- After the resolution has been passed, the identical process is going to be followed and the DIR – 11 form together with the DIR – 12 form has to be filed.
- Once the forms have been filed, the director’s name will be removed from the website of the Ministry of Corporate Affairs.
How MyRegistration Company helps in the removal of directors?
With MyRegistration, it will be possible to remove a director in 3 simple steps:
- We will be addressing your queries regarding the director’s removal.
- The required documents for the removal process will be prepared by our experts.
- We will help you comprehensively to execute the entire process.
- We will make the removal process simple and speedy.
- Our experts will be providing you with guidance regarding the whole process.
- We will draft a resolution and forms will be filled and filed by our experts on your behalf.
- We will provide you with the best support.
- Our experts will answer all your queries promptly.